Hello, please assist me in solving the following questions so that I can figure out the formulas and logic behind them:

8.1) Consider the following 2015 data for Newark General Hospital (in millions of dollars):

Static budget flexible budget Actual Results

Revenues $4.7 $4.8 $4.5

Costs 4.1 4.1 4.2

Profits 0.6 0.7 0.3

a.) Calculate and interpret the profit variance:

b.)Calculate and interpret the revenue variance:

c.) Calculate and interpret the cost variancance:

d.) Calculate and interpret the volume and price variance on the revenue side:

c.) Caluclate and interpret the volume and management variances on the cost side:

F.) How are the variances calculated above related?

8.3) Here are the budgets of Brandon Surgery Center for the most recent historical quarter (in thousands of dollars):

Static Flexible Actual

Number of surgeries 1,200 1,300 1,300

Patient Revenue $2,400 $2,600 $2,535

Salary Expense 1,200 1,300 1,365

Nonsalary Expense 600 650 585

Profit $600 $650 $585

The Center assumes that all revenues and costs are variable and hence tied directly to patient volume,

A.) Explain how each amount in the flixible budget was calculated? (hint: examine the static budget to determine the relationship of each budget line to volume)

b.) (I have the answer to this question and it is needed to answer question C) Determine the varienences for each line of the profit and loss statement, both in dollar terms and in percentage terms. (hint: each line has a total variance, a volume variance, and a price variance for REVENUES and management variances (FOR EXPENSES).

Answer to b.):

Patient Revenue

Dolar total variance: =actual budget-static budget amount

=$2,535,000-2,400,000

%Total variance =$3135.000

Dollar volume variance =Flexible budget amount-Static budget amount

=2,600,000-2,400,000

=$2,000,000

% VOLUME VARIANCE =$2,000,000/$2,400,000=0.0833=8.33%

DollaR management variance =ACTUAL BUDGET-FLEXIBLE BUDGET

=$2,535,000-$2,600,000=-$65,000

% Managment variance =-65,000/$2,400,000=-0.0271=-2.71%

Dollar check calculation =$2,000,000+(-$65,000)=$135,000

%Check Calculation =8.33%+(-2.71%)=5.62%

Salary Expenses

Dollar total variance =Actual budget amount-static budget amount

=$1,365,000-$1,200,000

=$165,000

%Total variance =$165/$1,000,000=0.1375=13.75%

=$1100,000/$1,200,000=0.0833=8.33%

Dollar volume variance =Actual budget amount-flexible budget amount

=$1,365,000-$1,300,000=$65,000

Dollar Check calculations: =1,000,000+%65,000=$165,000

%check calculations =8.33%+5.42%=13.755

Non-Sarary Expenses:

Dolar total Variances =-$15,000

%Total variances = -$15,000/$600,000= -2.50%

Dollar volume Variances =$50,000

% VOLUME VARIANCE: =$50,000/%600,000=8.33%

dOLLAR mANAGEMENT VARIANCES: =-$65,000

%MANANGEMENT VARIANCES: = -10.83%

DOLLAR CHECK CALCULATION= = -$15,000

% CHECK CALUCATIONS ` =-2.50%

PROFIT

DOLLAR TOTAL VARIANCE = -$15,000

%total variance = -2.50%

DOLLAR VOLUME VARIOANCE =550,000

%VOLUME VARIANCE = 8.33%

dollar management variances =-$65,000

%managment variances =-10.83%

dollar check calculation = -$15,000

%check calcualation = -2.50%

NOte that the profit variances and non-salary expenses are the same, This occurs not because of the same economic tie but rather as a consequenc e of the values used in the problem. Also note that the percent volume varience is a positive 8.33 perent in all cases. Because the variance in volume itselft is 100/1,200=0.0833=8.33% each volume-adjusted dollar amount on the flexed budgwet changes by that same amount as comparecd with the static budget . Of course the actual budget contains values affected by both volume changes and changes in ohter (management) variables.

c), What do the Part b reasults tell Brandon's managers about the surgery center's operations for the quarter??? (note inorder to get the correct answer for this question you need the above answer to question B.)

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